Postal Services Bill

Countess of Mar Excerpts

Tuesday 24th May 2011 Lords Chamber

[Baroness Drake]

My Lords, government Amendment 3 to Clause 24 is in itself desirable. If the Royal Mail pension plan is to be divided into two or more pension schemes, as distinct from sections, it is better that all trustees co-operate with efficient administration and have the power so to do. What is most interesting about the amendment, however, is that it reveals for the first time during the Bill’s progress that the Government's intention may be to split the Royal Mail pension plan into two or more separate schemes, as distinct from sections.

It would be possible not to split the scheme and run the Royal Mail pension plan as a segregated scheme similar to the railway pension scheme. From the perspective of scheme members, that may well be a preferable outcome, because the governance structures would remain in place, but one can anticipate that that may not be the Government's preferred outcome. As the amendment now introduces separate schemes into the Bill, as distinct from separate sections, it raises questions that I put to the noble Baroness.

Is it now the Government’s decided intention to split the Royal Mail pension plan into separate schemes post-privatisation? If the Royal Mail pension plan is to be so divided, is the Post Office scheme to be hived off, leaving the reduced Royal Mail pension plan with the privatised Royal Mail, or vice versa? What is the Government's intention on consulting the trustees on such separation?

A fourth point that I know will be of concern to scheme members attracted some attention in the debate in the House of Commons. There is no power to wind up in the rules of the Royal Mail pension plan. That is a very important safeguard for the current members, which ought to be replicated.

During the House of Commons Committee debate on 30 November 2010 the Parliamentary Under-Secretary of State for Business, Innovation and Skills, Mr Edward Davey, commented to the effect that inserting a winding-up provision would be prevented by the then Clause 19 of the Bill, which is now Clause 20, dealing with the “no worsening of benefits” provision. He said—

[The Countess of Mar]

I am sorry to interrupt the noble Baroness. Might I ask the two people speaking behind the Woolsack to retreat into the Prince’s Chamber, as is suggested in the Companion?

[Baroness Drake]

The Parliamentary Under-Secretary said:

“Any amendment to the RMPP rules that would allow the scheme to be more easily wound up would fall foul of the protection provided for members under clause 19(2), as any such amendment would have a material effect on members’ ‘relevant pension provision’ … and given that our intention is to take on the historic deficits for the Royal Mail together with a more manageable scheme, it would not be appropriate for the Secretary of State to make any amendment to the RMPP that would allow the scheme to be wound up”.—[Official Report, Commons, Postal Services Bill Committee, 30/11/10; col. 445.]

In view of that debate, and in view of the fact that this amendment now introduces an intention to separate the plan into separate schemes rather than separate sections, is it the Government’s position that there will be no change to the winding-up provisions in any separate scheme if and when a section of the RMPP is constituted as a separate pension scheme?